Top stories this week are likely to include: Dilma Rousseff’s possible veto of Forestry legislation; The search ends for Cuban actors who defected; the vote on drug victims compensation law in Mexico; construction resumes on Peru’s Conga mine.
Brazil’s Forestry Laws: Brazilian President Dilma Rousseff is facing extreme pressure from environmentalists, who believe that a new forestry bill, which last week passed both legislatures after fierce lobbying by agroindustry, will speed up deforestation of the Amazon. Current laws establish that 80 percent of private land in the Amazon region is off limits for development. The new law will allow for the development of vast areas that were previously off limits. According to observers, the changes threaten 270,000 square miles (690,000 square kilometers) and will prevent Brazil from reaching its deforestation reduction goals. “It’s fitting—if a bit ironic—that this is playing out in the country that will soon host the Rio+20 Conference,” says Chris Sabatini, editor-in-chief of Americas Quarterly.
Cuban Defections: Two young Cuban actors who disappeared last week while making their way to the New York-based Tribeca Film Festival for the U.S. premiere of the film Una Noche have resurfaced and announced their intention to apply for asylum in the United States. The actors, both in their 20s, went missing during a brief stopover in Miami and had not been heard from in nearly a week. “Defections from Cuba are common;” says AQ editor Matthew Aho, “they result from a combination of accommodating U.S. asylum policies for Cubans and the lack of real opportunities for Cuban youth.”
Conga mine construction to resume: The largest-ever mining investment in Peru’s history will be allowed to move forward this year, after months of construction delays caused by local protestors’ fears of environmental damage and water contamination. The Conga protests were the first major crisis of President Ollanta Humala’s administration. His decision to allow the project to proceed will be another major test of his government and could spark a wave of similar protest in the Cajamarca region. “For many who questioned Humala’s commitment to a market economy and investment, his actions in this case demonstrate that the Peruvian President—at least when it comes to mining—is a pragmatist, says Sabatini.
Drug Crimes Compensation: A bill that would provide victims of drug violence passed Mexico’s Senate last week and is poised to advance through the legislative process this week. The measure, which would provide victims of drug violence with up to $70,000 in financial compensation, along with a variety of specialized social services, is a central demand of a growing piece movement being led by poet Javier Sicilia. The bill’s sponsors, Senators Fernando Baeza and Tomas Torres, are optimistic about its passage, saying it “lays the foundations to reconstruct the social fabric which has been so gravely affected by violence.”
With today’s release of its Spring 2012 issue, Americas Quarterly has unveiled a new index that measures social inclusion in the Americas. This ranking evaluates 15 different indicators and compares them across 11 countries in the hemisphere. The variables include a country’s economic competitiveness, percent of national GDP spent on social programs, level of political and civil freedoms, and citizen perception of personal empowerment and government responsiveness in that country.
Out of a maximum of 100, Chile came out on top with a score of 71.9, while Guatemala ranked lowest at 7.5. The index praises Chile’s “consistently high rankings across almost all indicators” and cites “severe inequalities by race and ethnicity” in the case of Guatemala, adding that “Indigenous and Afro-Guatemalans lag far behind” socioeconomically. Uruguay and Brazil ranked second and third, respectively.
For four variables—enrollment in secondary school, percent of population living on more than $4 per day, access to adequate housing, and percent of population with access to a formal job—Americas Quarterly uses data collected by the World Bank in household surveys and disaggregated by race and gender.
According to the index, social inclusion is defined as “the concept that a citizen has the ability to participate in the basic political, economic and social functioning of his or her society. It includes not just economic empowerment, but also access to basic social services, access to infrastructure (physical and institutional), access to the formal labor market, civil and political participation and voice, and the absence of legally sanctioned discrimination based on race, ethnicity or gender.”
Access the full results of—and methodology behind—AQ’s social inclusion index.
After much speculation, Argentine President Cristina Fernández de Kirchner once again proved she has the guts to move forward with a politically controversial government takeover. This time around Spanish oil company Repsol was the victim. In 2009, another Spanish company, Marsans, was forced to cede the Argentinean flagship airline to the government, and in 2008, $30 billion in private pension funds were nationalized.
Ms. Fernández announced a week ago that her government would expropriate 51 percent of YPF from Repsol, which would give the government control of the company. She cited insufficient investment resulting in energy scarcity as the reason for the takeover.
As with Aerolineas Argentinas' expropriation, the YPF takeover was popularly supported. The majority of Argentineans believe that the state should control strategic resources like oil. According to the consultancy Poliarquía, six out of every ten Argentines support the measure. This figure is lower than the 74 percent support rate reported by a government-friendly poll.
This public support, however, must not be confused with support of the government’s handling of energy policy. Indeed, according to polls, most Argentineans blame the government over YPF Repsol for dwindling hydrocarbon reserves. The public is aware how government price controls and fluctuating subsidies have distorted market forces and made necessary investments less attractive.
Top stories this week are likely to include: continued fallout over YPF expropriation; Leon Panetta to South America; Humala approves controversial mining project; and IMF warns of protectionism in Latin America.
Global Response to YPF Seizure: Repsol has threatened to take legal action against any company that invests in YPF SA, its Argentine subsidiary that was nationalized last week. This will complicate efforts by Argentine Planning Minister Julio de Vido to elicit investments in YPF. Beyond Repsol’s response, Argentine President Cristina Fernández de Kirchner faces continued condemnation from Spain and the European Parliament, which is looking at the possibility of imposing trade sanctions on Argentine imports. Petrobras, Brazil’s state-owned oil corporation, has pledged to expand cooperation with Argentina. Look for further official reaction from Europe this week.
Panetta in South America: U.S. Secretary of Defense Leon Panetta departs today for a five-day tour in South America, where he will visit Colombia, Brazil and Chile. A defense official reports that Panetta will stop in Bogotá to evaluate U.S.-funded Plan Colombia and discuss further measures to combat the Revolutionary Armed Forces of Colombia (FARC). Then, he heads to Brasilia and Rio de Janeiro to discuss potential military deals, including Embraer’s participation in a now-cancelled military aircraft contract for the U.S. effort in Afghanistan. AQ Senior Editor Jason Marczak notes, “Although the Embraer deal was worth less than $400 million, getting it back on track would be a huge plus for U.S.-Brazil relations.” Panetta and his Brazilian and Chilean counterparts will also discuss drug interdiction measures off the coasts of Africa and Central America—two of the world’s worst drug transit points.
Peru Approves Conga Mine: Peruvian President Ollanta Humala gave conditional approval last week to the controversial Conga mining project, constructed by U.S.-owned Newmont Mining Corporation. Previously, it had been stalled due to environmental concerns and protests by local Indigenous peoples in the Cajamarca region. Independent environmental auditors recommended a series of changes including larger artificial reservoirs that would allow for the adequate supply of water to local populations; Humala gave Newmont the green light for construction on the condition that these suggestions be met. Cajamarca President Gregorio Santos remains unconvinced, so watch out for the possibility of further local backlash.
IMF Warns of Protectionism: During its spring meetings over the weekend, the International Monetary Fund predicted 3.75 percent growth for the Latin America and Caribbean region this year. The IMF also warned emerging economies against adopting protectionist measures in response to the “accommodative monetary policy” adopted by the U.S. and other developed countries. The 3.75 percent figure represents a moderation of the region’s 4.5 percent growth in 2011. Given Brazil’s criticism of the United States’ monetary behavior, pay attention to whether Latin American economies heed the IMF’s advice.
*RELATED – Angelina Jolie Visits Refugees in Ecuador: In her capacity as a United Nations High Commissioner for Refugees ambassador, Angelina Jolie visited displaced Colombian refugees in Ecuador over the weekend. Read an Americas Quarterly dispatch on refugees in Ecuador from the Winter 2012 issue.
U.S. Secretary of State Hillary Clinton emphasized deepening business ties and promoting innovation in a speech to Brazil’s National Confederation of Industry (CNI) on Monday. Clinton had traveled to the capital city of Brasilia for a two-day visit following her participation over the weekend in the Summit of the Americas meeting in Cartagena, Colombia.
In her remarks before the CNI, Clinton noted that last year trade between the U.S. and Brazil reached $75 billion, and that Brazilian investment in the U.S. now stands at $15.5 billion. She also praised Brazil for undergoing inclusive economic growth in recent years, saying the country “has ascended to the world stage as an emerging economic dynamo, lifting millions of Brazilians into the middle class while maintaining and improving democratic institutions.”
However, she said the U.S. and Brazil could do much more. “I believe that the opportunities and potential for greater investment, trade, growth and jobs is only now being tapped,” she said. Specifically, Clinton pointed to private-sector innovation as a key element of the bilateral relationship between the U.S. and Brazil, yet she also emphasized a role for government, which she said “can work closely with business leaders to create the conditions [for innovation to] take hold.” In particular, the secretary mentioned a double taxation treaty, a bilateral investment treaty and a future free-trade agreement.
Beyond the CNI speech, the secretary met yesterday morning with the new head of Petrobras, Maria das Gracas Foster and led the U.S. delegation for the third U.S.-Brazil Global Partnership Dialogue. The Global Partnership Dialogue builds upon previously-reached agreements in the areas of development and education cooperation and global political and economic issues.
Today, she and President Dilma Rousseff speak at the First Annual High-Level Meeting of the Open Government Partnership (OGP). The OGP, launched eight months ago by President Rousseff and President Barack Obama, includes 42 countries that have pledged to prevent corruption, promote transparency and devise ways to harness technology to empower citizens.
Top stories this week are likely to include: the World Bank presidency goes to a vote; Secretary Clinton in Brazil; Repsol proposes talks with CFK; Chávez authorized for 90-day leave; and the possibility of progress in drug-related violence.
World Bank Presidency: With Colombia’s José Antonio Ocampo withdrawing his candidacy over the weekend, the contest for the next president of the World Bank is a two-person race. A vote is scheduled for today to decide between the two remaining candidates: the United States’ Jim Yong Kim and Nigeria’s Ngozi Okonjo-Iweala. Despite Brazil’s call recently for the BRICS nations to rally behind one candidate, pay attention to which candidate the developing economies will cast their vote. AQ Editor-in-Chief Christopher Sabatini says, “The ability of developing countries to really force a change in the international financial institutions depends on their ability to ally. They split over the IMF presidency last year, and despite their narrowing to two candidates for the World Bank, it’s difficult to imagine them rallying over the Nigerian candidate.”
Secretary Clinton in Brazil: After yesterday’s conclusion of the Sixth Summit of the Americas in Colombia, U.S. Secretary of State Hillary Clinton will be in Brasilia, Brazil, today and tomorrow for meetings on the Global Partnership Dialogue and the Open Government Partnership (OGP). She and Brazilian President Dilma Rousseff will “welcome 42 new countries into the [OGP] as they announce concrete commitments to prevent corruption, promote transparency, and harness new technologies to empower citizens,” according to a State Department press release. AQ Senior Editor Jason Marczak notes that “with last weekend’s summit not signaling any kernel of hemispheric unity, this week’s meetings are an important opportunity for the Americas’ two largest economies to show that one of the most important relationships in the hemisphere continues to strengthen.”
Repsol Proposes Talks with Argentina: Reports surfaced last week that the Argentine government was mulling a takeover of the majority of shares of YPF SA, the country’s largest oil company. Those reports sparked an international backlash especially in Spain, where YPF’s parent company Repsol is based. Spain’s minister of industry warned on Friday that Argentina would become an “international pariah” if it went ahead with the takeover—and Argentina has since delayed the project rather than abandon it. The head of Repsol is currently in Argentina and is urging talks between his company and the Argentine government. Look out for developments this week.
Chávez in Cuba for Extended Stay: Although he planned to attend last weekend’s Summit of the Americas, Venezuelan President Hugo Chávez instead departed for further medical treatment in Havana after doctors advised him on Saturday not to travel to Cartagena. On the same day, the Venezuelan legislature legally authorized Chávez to leave the country for up to 90 days. Pay attention to how Venezuelans react to the possibility of a prolonged absence of the president—especially the opposition eager to unseat him.
Progress in Drug-Related Violence?: Last weekend’s Summit “served as a good forum for discussion over drugs—and that was about it,” according to Sabatini. But while no final declaration was made on this longstanding problem, there was one glimmer of hope on Saturday. El Salvador, one of the Northern Triangle countries embattled by the bitter gang violence surrounding narcotics trade, experienced its first homicide-free day since President Mauricio Funes took office in June 2009. Whether this is a one-off success or the beginning of a pattern remains to be seen.
President Dilma Rousseff arrived in the U.S. on Sunday for an important diplomatic visit. This is the third meeting between the Brazilian head of state and U.S. President Barack Obama, who visited Brazil in March 2011. With the theme "Agenda of the twenty-first century between Brazil and the United States," the short visit was intended to highlight commercial and educational issues, but racial inclusion should not be left out of the discussions.
Despite not being received as part of a state visit—as in the case of the recent visits from the leaders of India and China—the meetings aimed to rekindle relations that are currently unsettled by commercial disputes and other international affairs such as Cuba and Iran. One of the highlights of the visit is also the Science Without Borders program, a Brazilian project that aims to send 100,000 students abroad to study science and technology. Plans are for the United States to be the main recipient.
Although innovative, the Science Without Borders program has been criticized in Brazil for its elitist character. Last week the Brazilian NGO Educafro protested in Brasilia for the program to include a quota for Afro-Brazilian students. As it is, the selection criterion only considers academic achievement and fluency in English, a focus only young wealthy people can afford. Without changes to the selection process, Afro-Brazilians will increasingly be left behind in science, technology, engineering, and math—the future of Brazil.
Brazilian President Dilma Rousseff met with President Obama yesterday on her first official visit to the United States since assuming office in January 2011. At the top of the Brazilian agenda was a push for U.S. collaboration in countering a global trend of countries keeping their currencies artificially undervalued in order to make their export prices more competitive.
According to Rousseff, a multilateral effort is needed to halt competitive exchange rate devaluations, which she contends impair growth in countries like Brazil. Now the world’s sixth-largest economy, Brazil’s trade balance with the United States has gone from a $6.4 billion surplus in 2007 to an $8.2 billion deficit in 2010. This is driven in large part by a strong real, which has boosted Brazil’s demand for imports.
Both presidents praised each other on fostering strong bilateral relations, but it was also acknowledged that there is more to be done. According to Obama, “The good news is that the relationship between Brazil and the United States has never been stronger. But we always have even greater improvements that can be made.” Among other things, the United States is trying to help U.S. businesses profit from major oil discoveries off Brazil’s coast and from growing Brazilian investments in advanced military equipment such as fighter jets.
President Rousseff is in Boston today to speak at Harvard University and the Massachusetts Institute of Technology.
Top stories this week are likely to include: Dilma Rousseff in Washington; Sixth Summit of the Americas on Saturday; Chávez possibly seeking treatment in Brazil; Maras and Zetas reportedly joining forces; and Boudou under investigation.
Dilma in Washington: Brazilian President Dilma Rousseff begins a three-day visit to Washington today, where she will meet with her U.S. counterpart Barack Obama. This is Rousseff’s first visit to the U.S. since taking office in January 2011. Aside from meetings at the White House, Rousseff will speak at the U.S. Chamber of Commerce later today, and give a public speech at Harvard University tomorrow. In the Financial Times, Moisés Naim calls for the two countries to agree to a trade deal as a tangible outcome. Adds AQ Editor-in-Chief, Christopher Sabatini, “There will be plenty to discuss, from improving bilateral commerce and investment, Brazil’s recent flurry of legislation favoring local content and business, Iran, and—I hope—the upcoming presidential elections in Venezuela.”
Summit of the Americas on Saturday: Cartagena, Colombia, will host this weekend the Sixth Summit of the Americas, the regional conference of heads of state organized under the aegis of the Organization of American States. This year’s theme is “Connecting the Americas: Partners for Prosperity.” But will the summit yield any significant results? Notes Sabatini: “While this will be a great opportunity to show off how far Colombia has come in the 18 years since the summit process started, there is really very little the summit can accomplish beyond speeches and vague promises.”
Chávez May Seek Treatment in Brazil: Although Venezuelan President Hugo Chávez landed in Havana on Sunday to receive his latest round of radiotherapy, Brazilian media has been reporting that Chávez may seek further treatment at Sírio-Libanês hospital in São Paulo. This is the same hospital where former Brazilian President Luiz Inácio Lula da Silva last year successfully recovered from cancer surgery. Specifically, O Globo has reported—citing anonymous sources—that Chávez’ cancer has metastasized and may spread to his liver. Although the Venezuelan embassy in Brasília has denied the reports, pay attention to how this story develops over the coming days.
Maras-Zetas Alliance: Guatemalan authorities this weekend reported that the deadly Mara Salvatrucha gang, which dominates Central America’s Northern Triangle, has formed a pact with the equally dangerous Zetas group in Mexico for control of key drug transit routes from South America to the United States. In an already violence-plagued Central America, the alliance spells bad news for counternarcotics officials and may bolster the positions of Guatemalan President Otto Pérez Molina—a proponent of drug legalization—at this weekend’s Summit of the Americas. “An alliance between two of the region’s most feared criminal networks yet again reinforces the critical need for a real regional approach to reducing insecurity. The drug traffickers don’t respect borders and neither should counternarcotics efforts,” notes AQ Senior Editor Jason Marczak.
Future of Boudou: Argentine Vice President Amado Boudou is now under investigation by federal authorities for his actions as economy minister—in the two years prior to assuming the vice-presidency—specifically that he helped printing company Ciccone Calcográfica get out of bankruptcy. Boudou has denied the charges and still has the full support of President Cristina Fernández de Kirchner and her administration. After a raid of Boudou’s apartment last week, there may be new developments this week on the ongoing investigation.
After just over a century of amicable relations, Brazil has decided to cool its relationship with Iran.
Gone are the days when Brazil's leader, President Luiz Inácio "Lula" da Silva (2002-2010), worked hard to strengthen Brazil's partnership with Iran, defending Iranian interests, sharing and learning from similar policy experiences over cafezinho.
At a time when Brazil has sought every opportunity to engage the international community and increase its influence as a mediator of conflict and peace, why has Brazil's new president, Dilma Rousseff, refrained from strengthening the government's ties with Iran?
The answer lies in Rousseff's personal experiences and geopolitical ambitions.
As someone who experienced human rights violations first hand under Brazil's military dictatorships (1964-1985), Rousseff has been unwaveringly committed to human rights. She has made it crystal clear that she will not support Iran unless President Mahmoud Ahmadinejad seriously addresses this issue.
It's striking how quickly two nations sharing similar economic and geopolitical interests have suddenly distanced themselves from each other and how Brazil's decision may negatively affect Iran's relationship with other countries.
What this also suggests is that amicable relationships between similar nations are never guaranteed and that a sudden change in government interests and aspirations can reverse historic partnerships while having broader geopolitical ramifications.
For Rousseff, personal experiences matter.
As a high school student from the city of Belo Horizonte, she joined a Marxist revolutionary group called Palmares Revolutionary Armed Vanguard (Var-Palmares), which sought to dethrone a military government that repeatedly violated civil and human rights.
In 1970, she was arrested, interrogated and placed in prison. While serving three years, Rousseff was periodically tortured: electrical shocks ran throughout her body; she was incessantly beaten and called names; she was hung upside down in between two steel platforms in what the military called the pau de arara ("parrot’s perch"). By the time of her release at 25, she lost more than 22 pounds and her thyroid glands were nearly destroyed.
Needless to say, these horrific experiences had an enduring imprint on Rousseff's foreign policy views.
Indeed, when questioned about Iran during her campaign trail in 2009, the first two words to often come out of her mouth were "human" and "rights." The Iranian regime's atrocious history of killing thousands of dissidents, when combined with Iranian court orders to have several people stoned to death for violating the law was viewed by Rousseff as "medieval behavior." Moreover, the regime's decision to continuously throw political opponents in jail touched a sensitive nerve with Rousseff.
She made it very clear that before any business took place with Iran, Ahmadinejad would need to stop these barbaric acts. Yet this may prove difficult as Ahmadinejad's political influence is often perceived as limited because of the presence of Iran's Supreme Leader Ayatollah Ali Khamenei.
Being blamed and essentially ignored by Ahmadinejad also didn't help. Last year, Ahmadinejad's media adviser, Ali Akbar Javanfekr, was quoted as stating that Rousseff had "destroyed years of good relations" between them.
Under Lula, Brazil strengthened its political and economic ties with Iran through trade (indirectly via Dubai, estimated at $1.25 billion in 2010) and investment in Iran's oil sector. But when Ahmadinejad visited Latin America this January, he avoided meeting with Rousseff. Apparently he regrets having done so and plans to meet with her later this year.
Rousseff's geopolitical aspirations have also caused her to step away from Tehran. After Lula joined Turkey in 2010 to vote against UN sanctions on Iran for failing to disclose information about its nuclear reactor site and ignoring Secretary of State Hillary Clinton's request to do so, it appears that Rousseff views distancing herself from Iran as a way to strengthen Brazil's relationship with the United States.
Through these efforts, it seems that Rousseff is seeking to garner U.S. support for a permanent seat on the UN Security Council, as well as increasing Brazil's influence in major international financial institutions, such as the International Monetary Fund.
Without Rousseff's support, Ahmadinejad faces problems in Latin America.
Iran has tried to strengthen ties with Venezuela, Ecuador, Bolivia, Cuba, and until recently, Brazil. And it's opened six embassies in the region since 2005, sans Brazil. But Ahmadinejad can essentially forget about getting the support of Brazil's close economic allies, such as Mexico, Argentina and Chile. Ahmadinejad has also failed to live up to his promise of helping spur economic development in the region.
At a time when he is trying to increase his legitimacy, given his hostile relationship with Israel and efforts to develop his nuclear reactors, Ahmadinejad might not be able to afford losing his Latin friends, as they have defended him in the past and their support makes him look less isolated in the world.
This freeze in relations with Brazil, and Iran's gradual loss of allies in the region, also opens up further opportunity for the United Nations to impose and enforce additional sanctions on Iran. Should this occur, Ahmadinejad faces the specter of other allies questioning their relationship with Iran, which could have serious political and economic repercussions for Iran.
Despite the rich history that these two nations share, it seems unlikely that Rousseff will want to strengthen her ties with Ahmadinejad.
With aspirations to increase Brazil's international influence and geopolitical importance, she will likely place more stock in strengthening her relationship with the United States and other cooperative nations within the United Nations. Unless Ahmadinejad changes his tune on human rights and decides to fully abide by UN rules, Iran's losses may go beyond Brazil.
Eduardo J. Gomez is assistant professor in the department of public policy and administration at Rutgers University.